Nationwide cuts mortgage rates despite Bank of England holding interest rates at 4.5%

Britain’s biggest building society is lowering mortgage rates on a number of its products by up to 0.26 percentage points. 

Nationwide is primarily aiming to woo first-time buyers and home movers buying with smaller deposits. 

The rate cuts will apply to selected two, three and five-year fixed rate mortgages covering between 80 per cent and 95 per cent of a property’s value. 

From tomorrow it will offer the lowest fixed rate mortgage for home movers with a 5 per cent deposit.

The 4.99 per cent five-year fix comes with a £999 fee. For someone buying with a £200,000 mortgage that would equate to paying £1,168 based on a 25 year repayment term.

First-time buyers with a 5 per cent deposit may have to pay slightly more. Nationwide is offering them a 5.04 per cent rate with a £999 fee. The mutual is also offering a £1,495 fee option with a 4.99 per cent rate. 

Nationwide is reducing rates by up to 0.26 percentage points effective from tomorrow

Aaron Strutt, of mortgage broker Trinity Financial, said: ‘Nationwide lowering its rates despite the Bank of England base rate staying at 4.5 per cent shows how keen big lenders like Nationwide are to issue more mortgages and that fixes are still coming down. 

‘These rate changes are targeting borrowers with smaller deposits which clearly boosts first-time buyers and the many borrowers keen to get on the property ladder this year.’

The mutual will also be offering a number of other competitive deals. 

Its lowest two-year fixed rate aimed at home movers buying with a 20 per cent will fall to 4.49 per cent with a £999 fee from tomorrow.

This is just shy of market leader Halifax which is offering a 4.43 per cent deal.

Those looking to remortgage without significant equity also stand to benefit from Nationwide’s changes.

Nationwide’s lowest two-year fix for those remortgaging with 15 per cent equity in their home is falling to 4.84 per cent with a £999 fee.

Carlo Pileggi, senior mortgage manager at Nationwide, said: ‘Our latest rate cuts will be welcome news to borrowers with smaller deposits, particularly first-time buyers. 

‘We’re pleased to once again be offering rates below five per cent for those with a 5 per cent deposit. 

‘The introduction of our new £1,499 fee products will also widen the choice of products available for those who are considering Nationwide for their mortgage needs.’